One of the hardest hit is NetApp, its stock
now trading at its lowest point in about five years
— the stock is about $22, a mere $6.9 billion market
cap. It's lost almost half its value in the last year, and
almost two-thirds of its value since 2011.

Now everyone is buzzing that Cisco might buck up and
buy its partner NetApp, which is the No. 5 storage vendor.

We've heard this Cisco-buying-NetApp scuttlebutt from multiple
people in the last week.

But we understand from people close to the company that such
a deal isn't going to happen. Not now, not ever.

Cisco is aware of the all the talk and is being asked all the
time, we hear from somebody close to the company. But the truth
is Cisco's "focus is on emerging technologies in
storage," and that the company is "looking forward instead of
backward."

For the record, Cisco spokesperson Nigel
Glennie declined comment, telling us, "We don't comment
on rumors and speculation." (We've reached out to NetApp as
well and will update when we hear back.)

NetApp CEO George
KurianScreenshot/YouTube

Why this rumor won't stop

With a $6.9 billion market cap today, NetApp isn't terribly
expensive for Cisco. (The joke in the industry, another
person told us, was that Cisco just needs to wait another 3
months and NetApp would be even cheaper.)

NetApp is cheap because it "missed" the biggest opportunity in
its industry, the shift to flash storage, another source told us.
The company just finally bought a flash startup, SolidFire,
in December.

But this is years after its competitors were snapping up flash
vendors. NetApp paid dearly for it, too, spending $870
million in cash on SolidFire. If Cisco bought
NetApp it would gain SolidFire, as well as all of NetApp's
enterprise storage customers.

Plus, Cisco needs storage technology.

The struggles in the storage industry come from a movement
called "converged" and "hyperconverged" computing. That means
that companies are buying their computers, networking, and
storage all together as a bundle, Miki Sandorfi, a vice president
at major storage player Hitachi Data Systems tells us.

Storage vendors who are just selling storage are struggling ...
from EMC to NetApp, Sandorfi says.

Cisco was one of the leaders of the "converged" computing market,
with its UCS computers/networking/storage boxes. It originally
partnered with EMC for the storage part, but
those companies don't like each other now. Cisco is now
partnering with everybody, including NetApp, IBM, Pure Storage.

But to really compete with HP and EMC/Dell, Cisco needs its
own storage tech.

Cisco actually tried to build its own storage offering and that
was a disaster. It bought a startup called Whiptail for $450
million in 2013, and after a couple of years the product still
didn't work. One of new Cisco CEO Chuck Robbins'
first acts was to kill the product and lay off the team.

Cisco Live/Business Insider

Cisco is likely up to something in storage

While an acquisition may seem obvious for Cisco, others are
telling us that Cisco may be looking at an internal team to
build an original product.

Mario MazzolaCisco

We're hearing that this new team may even involve the legendary
triumvirate of engineers at Cisco known as "the heart, soul,
and brains" of the company: Mario Mazzola, Prem Jain, and Luca
Cafiero.

Robbins has already gone on record saying he's not a fan of that
funding model, but he
wants to create teams internally that develop
new products and are similarly rewarded if they succeed.

Meanwhile, the storage industry has already moved on to the new
thing beyond flash.

Intel and Micron have created a breakthrough new kind of storage
chip that is ideal for big-data, in-memory kinds of uses,
known as XPoint, which they say is 1,000 times faster
than flash and 1,000 more durable.

If Cisco is really focused on emerging storage technologies,
we can see why NetApp would not be its first choice.